Financing projects is a necessary yet difficult task for development work. Whilst in the past projects have been fully funded by donors, this has led to poor uptake and a lack of ownership on the part of the user. Initiatives to offer alternative methods of funding in order to allow project stability whilst still allowing the user the opportunity to purchase or part purchase the product or energy vector are being implemented. Examples include

Micro-loans

Corporate private sector investors can help fund micro-loan schemes, which allow users to purchase equipment over a period of time and have a low interest pay back period.

Carbon finance

An initiative set up by the World Bank whereby governments and companies in OECD countries can purchase greenhouse gas reductions in developing country projects. As projects require monitoring and evaluation in order to prove the offsetting this also helps enable project credibility.

Micro-franchise

Mr. Kalua using a microsolar unit in his home for reading in Malawi (Photo: Brave Mhonie/ SolarAid)

A micro-franchise is small franchise system, essentially a “business in a box” which allows people in developing countries the means to set up small business enterprises without the problems of finance, legal issues and licensing issues. One example is “Sunnymoney” a micro franchise of Solar Aid (Nick Sireau, 2010). Setting up small business enterprises is becoming increasingly popular with NGO's and governments in developing countries. For more information on setting up small businesses see the page on BusinessResources.